Dow closes at record high for 5th day, but is everyone happy?
NEW YORK -- On Wall Street, Tuesday was a day of high-fives for five highs. Five days in a row as the Dow gained 72 points to close at 21,963.
Since Donald Trump was elected president on November 8 -- 38 weeks ago -- the Dow is up nearly 20 percent.
The record high is just shy of the 22,000 mark Mr. Trump predicted it would hit. Wall Street is full of smiles these days.
In the first quarter of this year, the average 401(k) retirement account held more than $95,000. The average IRA, more than $98,000 -- which are both records, according to Fidelity Investments.
However, the strength of the market may not reflect the overall economy.
Joe Zidle of Richard Bernstein Advisors points out the markets reflect not politics -- but profits. Corporate profits have been climbing steadily for the last year and a half at giants like McDonald's (MCD) and Boeing (BA).
"We would give the stock market an A right now," Zidle told us. But that doesn't necessarily mean the economy scores the same way.
"I think the biggest mistake that people make is that they confuse companies with the economy," he added.
The stock market is grading out at an A, but Zidle says the economy is "not as strong."
Take cars for instance. After seven straight years of growth -- sales were down 7.5 percent at Ford last month; more than 10 percent at Fiat/Chrysler; and more than 15 percent at GM.
Melanie Epstein is seeing the effect at the Wempe Jewelers she manages in Manhattan.
"The middle-class buyer tends not be as spontaneous anymore," she said. "They don't buy at a whim, coming in and purchasing the piece right away. They're a little bit more cautious."
Zidle explains that wages still haven't caught up to job growth -- although he thinks that's next for what's still a growing economy.
Although the economy is not growing as quickly or robustly as many would like, it is still growing -- just not as fast as the stock market.
At eight years and counting, this is the third longest economic expansion in U.S. history. Keep in mind, however, the average recovery tends to last seven years.
